I was talking with an entrepreneur recently and he told me a story about their early days. The sold a bunch of their products to one of the local department stores, and they thought this was the big opportunity that they needed. But none of their stuff sold, and they couldn’t figure out why. So they went to one of the stores to see for themselves what was going on. They couldn’t find their things anywhere. Finally, after going through the whole store, they found their things in a department that to them seemed completely wrong.
Here’s what he said about that:
“That’s when I realized that we couldn’t sell through other stores, because they’ll put you in whatever box they think is right. We learned you have to make your own box.”
And that’s exactly what they’ve done – they’ve made their own box. They’ve taken a product that might seem fairly conventional, and they’ve created an entirely new meaning around it. They have their own line of stores, and even through the Global Financial Crisis they’ve been growing incredibly quickly.
That’s a pretty good metaphor for business model innovation. Instead of getting put into whatever box seems right, and then competing on price or differentiation, in business model innovation you create an entirely new market by making your own box.
It’s not the right route for everyone, but it’s worth thinking about. How can we make our own box?
Image source: flickr/Mr. T in DC
Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.